The e-commerce industry, which is currently one of the fastest-growing sectors in the country and expected to touch $200 billion marks by 2026, is hopeful that Finance Minister Nirmala Sitharaman would announce measures in the upcoming Budget to help the segment grow.
Some of the expectations of the sector from the Union Budget this year, including addressing woes related to consumption levels, bringing a coherent e-commerce policy and reforming the Goods and Services Tax (GST) rules. Moreover, e-commerce companies in India, including both major e-tailers Amazon and Flipkart as well as smaller players are working closely with retailers/kirana shopkeepers.
Hence, there is a hope that the central government might support them financially, which could provide a fillip to the sector. Digitisation, the core of this industry, is also expected to be strengthened and companies are hopeful that the regular internet shutdowns that curtailed online businesses last year will be restricted.
“While the budget is under consideration, given the economic conditions of 2019, it would be welcome to see the government roll out measures that support and drive growth of micro, small and medium enterprises and kirana stores, a vital link to the Indian economy. The focus should be to spur consumption from tier two as well as tier-three cities. As an enabler of small retailers and kirana stores, ShopX continues to work on supporting and digitising about 12 million stores across India that supports the daily needs of 400 million middle-class Indians, and looks forward to the government protecting the interest of the same,” said Amit Sharma, chief executive officer and founder, ShopX, an online retail networking platform.
A lot of firms operating in the e-commerce segment are start-ups, hence there is an expectation of likely waivers on angel tax for such firms.
“We expect the government to by all means maintain the corporate tax rate that was reduced to 22 per cent from 30 per cent last year. The drop-in tax rate would lead to relatively healthier cash flow within the system and enable companies to plough funds back into the business. In addition to this, we expect a waiver of angel tax for DPIIT (Department for Promotion of Industry and Internal Trade) registered start-ups, as announced in July last year. We are also keen to see what other fiscal policies the government will introduce to stimulate credit growth and give the overall economy the much-needed push. Further, reduction in personal income tax rates should be considered as it will relax financial strain to an extent and increase the individual purchasing capacity of taxpayers,” said Rohan Bhargava, co-founder, Cashkaro, an online coupon and discounts platform.
Speaking on a macro level, Bhargava said, “the government should consider making the necessary amendments in the current GST structure to make it more friendly for the private sector. It is among the critical steps towards ensuring ease of doing business and will go a long way in ascertaining compliance. It should also introduce policies that are more inclusive of the private sector and enable their participation in the upcoming mega projects (such as infrastructure). This will not only be an economically progressive step but will also bring in more transparency into the system.”
“Income tax holiday for start-ups should apply for all of them registered beginning April 2015. Under GST, the extra inputs should be credited back to start-ups (like for us, when we buy furniture, we have to pay GST in it, now when we rent, the GST in rent is adjusted against the already paid GST during purchase. But even then, the GST on purchase is much higher compared to what we adjust in rent, so we want that extra GST to be credited back to us,” said Sidhant Lamba, founder, Fabrento, an online furniture rental start-up. Meanwhile, Nirmala Sitharaman is all set to present the Union Budget on February 1, 2020
E-commerce sector has high hopes
Some of the expectations of the sector from the Union Budget this year, include addressing the woes related to consumption levels, bringing a coherent e-commerce policy as well as reforming the GST rules for them